[HN Gopher] OpenAI's Windsurf deal is off, and Windsurf's CEO is...
___________________________________________________________________
OpenAI's Windsurf deal is off, and Windsurf's CEO is going to
Google
Author : rcchen
Score : 197 points
Date : 2025-07-11 21:35 UTC (1 hours ago)
(HTM) web link (www.theverge.com)
(TXT) w3m dump (www.theverge.com)
| Ancalagon wrote:
| So Google, Meta, and Microsoft will just hollow out the best AI
| startups of their talent instead of buying them - out of fear of
| monopoly lawsuits I'm assuming?
|
| Nice plan I guess. Kind of obvious to spot though.
| brianwawok wrote:
| Likely cheaper too. Nothing to pay the original shareholders
| Kinrany wrote:
| It's been working with software developers with no issues.
| bix6 wrote:
| Can shareholders sue? I presume the only avenue is IP since
| that belongs to the company? Or the non-exclusive license
| somehow negates that? Brutal.
| Ancalagon wrote:
| I actually don't know if there's much that can be done unless
| there's some non-competes in those employees' contracts which
| are usually not very enforceable outside of finance iirc.
| bix6 wrote:
| Non competes aren't enforceable in California but the
| company owns the IP so I'm curious about this license
| loophole they are using.
| khazhoux wrote:
| "Buying the startup" just means handing over megabucks to do-
| nothing investors. If Google isn't buying any product or
| technology, why should investors get a talent fee?
| bix6 wrote:
| Do nothing investors who enabled the company to reach this
| point? Employees who chose lower salaries in expectation of
| shares being worth something? Come on now.
| DiscourseFan wrote:
| There are many AI startups and we are just in the beginning of
| learning how to use them. There will be some stupid company
| like those you've listed that figures out a way to use AI that
| is far better than any other implementation, and Google, Meta,
| and Microsoft may go the way of Yahoo and AOL, but we'll see
| bix6 wrote:
| Doesn't seem like it. Antitrust has no teeth so the mega
| corps are just buying all the talent with life changing cash.
| DiscourseFan wrote:
| The "talent" is not very talented, trust me. These are the
| short term whims of very large, increasingly bloated
| organizations. A leaner startup that knows what it has will
| not sell so quickly. At least, the odds will soon be in
| favor of whoever first decides to take that bet.
| rvnx wrote:
| Windsurf and Cursor are in the business of reselling ChatGPT and
| Claude at a loss, but the tech itself is not impressive at all
| cpursley wrote:
| Those wrappers are gonna go away now that there's Claude Code
| and Googles CLI thing. They are that much better.
| m_a_g wrote:
| Looks like Sama can't catch a break.
| parpfish wrote:
| I only learned this week that "sama" is "Sam Altman" and not
| the first name of some other ai startup ceo
| BobbyJo wrote:
| It's his hackernews username.
| browningstreet wrote:
| Well, more actively nowadays, it's his X username...
| mi_lk wrote:
| sama is nothing without drama
| foobiekr wrote:
| Good.
| 3abiton wrote:
| It's unclear if OpenAI cancelled the deal, or Google poached
| them? Either way, this season of "OpenAI Drama" is wild. First
| Meta, now Google. Your turn Amazon / Microsoft.
| jamessinghal wrote:
| Apparently OpenAI allowed the deal to expire; likely Google had
| already been in discussion with Windsurf as I'm sure they knew
| the deal was likely to die well before today.
| barbazoo wrote:
| > OpenAI's deal to buy Windsurf is off, and Google will instead
| hire Windsurf CEO Varun Mohan, cofounder Douglas Chen, and some
| of Windsurf's R&D employees and bring them onto the Google
| DeepMind team, Google and Windsurf announced Friday.
|
| > Mohan and the Windsurf employees will focus on agentic coding
| efforts at Google DeepMind and work largely on Gemini. Google
| will not have any control over nor a stake in Windsurf, but it
| will take a non-exclusive license to some of Windsurf's
| technology.
|
| Sounds to me like they're "hiring" them like one "hires" a
| consultant?
| consumer451 wrote:
| I did not see this coming. Wow. The game of thrones in SV.
|
| I wonder what happened with the OpenAI deal. Anyone have any
| guesses? My first guess is "Look at Claude Code, we can do this
| ourselves." But, I am likely thinking too simply.
|
| _edit after 4 upvotes:_ does this mean that Windsurf and its
| users will stop being iced-out by Anthropic? Or, is this the end
| of Windsurf?
| wagwang wrote:
| All of this game of thrones is going to create an amazing
| documentary if AI capabilities taper off and valuations vaporize.
| tamersalama wrote:
| Are the AI capabilities tapering-off, or commoditized? Building
| the next Windsurf (iteration 0) doesn't feel it's quite niche
| anymore.
| wagwang wrote:
| I think the current valuations imply at least 2 magnitudes of
| improvement over existing functionality.
| h1fra wrote:
| I know David Fincher is jumping on his seat
| DiscourseFan wrote:
| Obviously these things are difficult to tell from the outside
| xyst wrote:
| Apparently somebody missed crypto mania between 2019-2022
| sothatsit wrote:
| AI has nothing in common with crypto other than it being
| hyped a lot. The better comparison is the dot-com bubble.
| koolba wrote:
| > AI has nothing in common with crypto other than it being
| hyped a lot.
|
| Don't forget all the GPUs. Nvidia always gets its cut.
| sothatsit wrote:
| How did I forget about the GPUs! I have made a grave
| mistake, please forgive me.
| asdev wrote:
| Gary-Marcus-eating-popcorn.gif
| 0cf8612b2e1e wrote:
| Pour one out for the regular employees _not_ getting absorbed by
| Google and suddenly not millionaires like they imagined they were
| a week ago.
| plumeria wrote:
| Like in WeCrashed (2022)?
| kirlev wrote:
| https://web.archive.org/web/20250711213611/https://www.theve...
| metadat wrote:
| It's another Character.ai situation [0]. Unfortunate for any
| employees who aren't founders or researchers, as they don't get
| any payout or a nice new job from this exit structure. In fact
| they lose their whole time invested at the company.
|
| What a harsh time to work for an AI startup as a rank and file
| employee! I wonder how the founders justify going along with it
| inside their mind.
|
| [0] _Character.ai CEO Noam Shazeer Returns to Google_
| https://news.ycombinator.com/item?id=41141112 - 11 months ago (87
| comments)
|
| _Edit:_ Thank you @jonny_eh for the clarification. I can 't
| imagine it feels awesome being a leftover but at least you vested
| out. "Take the money and leave" is still a bit raw when the
| founders and researchers are now getting the initial payout +
| generous Google RSU's.
| takklz wrote:
| The rank and file equity pitch is quickly falling apart...
| bix6 wrote:
| Always has been
| bravetraveler wrote:
| Think it started that way... I'm currently in a
| vesting/allocation situation where the incentive is to drive
| the share price _down_.
| takklz wrote:
| Geeeeeze
| jonny_eh wrote:
| The "leftover" employees at Character were NOT screwed over.
| Options were converted to cash at the deal's valuation.
|
| Hopefully Windsurf employees are treated well here.
|
| Note: I worked at Character until recently.
| _jab wrote:
| On the flipside, I'm pretty sure the investors got screwed.
| jonas21 wrote:
| The investors made money too. The valuation at the last
| round was $1B, and Google paid them out at a valuation of
| $2.5B as part of the agreement [1].
|
| [1] https://www.theverge.com/2024/8/2/24212348/google-
| hires-char...
| helloericsf wrote:
| Honestly depends on when they got in. Seed investors?
| They're probably fine with their preferences. Series B and
| beyond? That's where it gets messy. What round you
| thinking?
| gowld wrote:
| Whose cash? OpenAI isn't paying, and Google isn't paying, and
| Windsurf investors already paid.
| ipsum2 wrote:
| Not really true, I believe the "acquiring" (i.e. Google)
| company buys some equity from the employees (windsurf).
|
| Edit: the people downvoting this clearly can't read, I made the
| exact same point as jonny_eh.
| gowld wrote:
| The acquisition of Windsurf was cancelled.
| pydry wrote:
| This might be the beginning of the end of tech VC startups in
| general.
|
| High interest rates make VC funding more expensive and now
| bigtech can swoop in, poach all the necessary staff and deprive
| investors of an exit.
|
| What is the point any more?
| sampton wrote:
| Zuck swoops in and hire them 100mm a piece.
| baal80spam wrote:
| I really think that Apple is smart to sideline this shitshow.
| raspasov wrote:
| This.
| metadat wrote:
| https://archive.today/urwCT
| ChrisArchitect wrote:
| What is the source Verge? Give us a link more than "Google and
| Windsurf announced Friday"
| asdev wrote:
| I never knew anyone who used Windsurf. These AI acquisitions have
| been unbelievable(in a bad way). WIX acquired some garbage
| Lovable.dev clone for 80 million. I think many of us are waiting
| for this bubble to pop(economy will likely pop too)
| sunaookami wrote:
| It was barely better than Cursor and they got shafted by
| Anthropic because of the takeover announcement so nobody really
| used it anymore because let's face it - Claude Sonnet is just
| the best coding model. Design-wise the chat panel and
| autocomplete integration was a bit nicer than in Cursor but not
| by much. Subscription for Windsurf was/is also 5$ cheaper.
| break_the_bank wrote:
| i don't think it was better than or comparable to cursor at
| all. except for the month prior to the OpenAI Acquisition
| news where some minor influencers on X were calling it
| better.
|
| if it was better it would have survived.
| cellis wrote:
| Base44 is absolutely not garbage. I've tried it and can say
| it's as good or better of a vibe-builder than Lovable or Bolt.
| Have you benchmarked it against the competition or can you
| otherwise substantiate the "garbage" claim? FWIW I do know one
| amazing engineer using Windsurf
| asdev wrote:
| all those projects are garbage and just create half bake
| prototypes that never see the light of day
| raincole wrote:
| Well I use Windsurf. It's a good alternative to GitHub Copilot.
| The free tier is on par with Copilot's paid plan.
|
| ...which no one talks about anymore. Okay I guess you have a
| point.
| upmind wrote:
| Does anyone know which side cancelled the deal?
| lvl155 wrote:
| OpenAI needs to up their game on Codex to be on par with Claude
| Code. o3 is a better planner relative to Opus.
| beering wrote:
| Where do you think Codex lags behind Claude Code?
| WeirderScience wrote:
| I wonder if this is a result of the previously reported clashes
| between OpenAI and Microsoft over access to the Windsurf IP
| (under their investment agreement)
| ghuntley wrote:
| For the love of God, can we get a reboot of the Silicon Valley
| television show? Just on AI. Like when they wrapped it, they
| wrapped it on AI usage. So, it's got the perfect arc for a reboot
| that focuses perfectly on AI.
| beering wrote:
| Even the original Silicon Valley didn't match the zaniness of
| real life. Why do we need a reboot? Just check HN!
| xyst wrote:
| C-level executives get paid. Labor gets stuck grinding at Google.
| What a waste. Google will probably shelve/hoard the IP from
| Windsurf.
| bhl wrote:
| I don't know anyone who heard or used Windsurf outside the Bay
| Area. Even Cursor feels very Bay Area bubbly (although that is
| the market to go after if you're in ai dev tools).
| jongjong wrote:
| Cursor does add value but it's just a thin layer on top of
| VSCode so companies could just build that in-house and don't
| need to acquire. There's no moat there.
| layer8 wrote:
| According to The Information, Microsoft gaining access to
| Windsurf's IP if OpenAI acquired them was a factor:
| https://www.theinformation.com/articles/openai-windsurf-brea...
| (paywalled)
| modeless wrote:
| I don't understand why Windsurf would care after they've
| exited.
| extr wrote:
| IMO other than the Microsoft IP issue, I think the biggest thing
| that has shifted since this acquisition was first in the works is
| Claude Code has absolutely exploded. Forking an IDE and all the
| expense that comes with that feels like a waste of effort,
| considering the number of free/open source CLI agentic tools that
| are out there.
|
| Let's review the current state of things:
|
| - Terminal CLI agents are several orders of magnitude less $$$ to
| develop than forking an entire IDE.
|
| - CC is dead simple to onboard (use whatever IDE you're using
| now, with a simple extension for some UX improvements).
|
| - Anthropic is free to aggressively undercut their own API
| margins (and middlemen like Cursor) in exchange for more
| predictable subscription revenue + training data access.
|
| What does Cursor/Windsurf offer over VS Code + CC?
|
| - Tab completion model (Cursor's remaining moat)
|
| - Some UI niceties like "add selection to chat", and etc.
|
| Personally I think this is a harbinger of where things are going.
| Cursor was fastest to $900M ARR and IMO will be fastest back down
| again.
| alanmoraes wrote:
| I never understood why those tools need to fork Visual Studio
| Code. Wouldn't an extension suffice?
| extr wrote:
| IIRC problem is that VS Code does not allow extensions to
| create custom UI in the panels areas except for WebViews(?).
| It makes for not a great experience. Plus Cursor does a lot
| with background indexing to make their tab completion model
| really good - more than would be possible with the extensions
| APIs available.
| efitz wrote:
| Cline and Roo Code (my favorite Cline fork) are fantastic and
| run as normal VS Code extensions.
|
| Occasionally they lose their connection to the terminal in
| VSCode, but I've got no other integration complaints.
|
| And I really prefer the bring-your-own-key model as opposed
| to letting the IDE be my middleman.
| libraryofbabel wrote:
| Some excellent points. On "add selection to chat", I just want
| to add that the Claude Code VS code extension automatically
| passes the current selection to the model. :)
|
| I am genuinely curious if any Cursor or Windsurf users who have
| _also_ tried Claude Code could speak to why they prefer the
| IDE-fork tools? I've only ever used Claude Code myself - what
| am I missing?
| rhodysurf wrote:
| It already does this btw, when you use Cc from the vscode
| terminal and select things it adds it to cc context
| automatically
| extr wrote:
| Cursor's tab completion model is legitimately fantastic and
| for many people is worth the entire $20 subscription. Lint
| fixes or syntax-level refactors are guessed and executed
| instantly with TAB with close to 100% accuracy. This is their
| final moat IMO, if Copilot manages to bring their tab
| completion up to near parity, very little reason to use
| Cursor.
| druskacik wrote:
| I'd like to ask the opposite question: why do people prefer
| command line tools? I tried both and I prefer working in IDE.
| The main reason is that I don't trust the LLMs too much and I
| like to see and potentially quickly edit the changes they
| make. With an IDE, I can iterate much faster than with the
| command line tool.
|
| I haven't tried Claude Code VS Code extension. Did anyone
| replaced Cursor with this setup?
| rapind wrote:
| You're looking at (coloured) diffs in your shell is all
| when it comes to coding. It's pretty easy to setup MCP and
| have claude be the director. Like I have zen MCP running
| with an OpenRouter API key, and will ask claude to consult
| with pro (gemini) or o3, or both to come up with an
| architecture review / plan.
|
| I honestly don't know how great that is, because it just
| reiterates what I was planning anyways, and I can't tell if
| it's just glazing, or it's just drawing the same general
| conclusions. Seriously though, it does a decent job, and
| you can discuss / ruminate over approaches.
|
| I assume you can do all the same things in an editor. I'm
| just comfortable with a shell is all, and as a hardcore Vi
| user, I don't really want to use Visual Studio.
| wagwang wrote:
| As far as I can tell, terminal agents are inferior to hosted
| agents in sandboxed/imaged environments when it comes to
| concurrent execution and far inferior to assisted ide in terms
| of UX so what exactly is the point?. The "UI niceties" is the
| whole point of using cursor and somehow, everyone else sucks at
| it.
| rhodysurf wrote:
| You're missing the point tho. The point of the cli agent is
| that it's a building block to put this thing everywhere. Look
| at CCs GitHub plugin, it's great
| wagwang wrote:
| CC on github just looks like Codex. I see your point, but
| it seems like all the big players basically have a CLI
| agent and most of them think that its just an
| implementation detail so they dont expose it.
| extr wrote:
| Not sure what you mean. "Hosted agents in sandboxed/imaged
| environments"? The entire selling point of CC is that you can
| do
|
| - > curl -fsSL http://claude.ai/install.sh | bash
|
| - > claude
|
| - > OAuth to your Anthropic account
|
| Done. Now you have a SOTA agentic AI with pretty forgiving
| usage limits up and running immediately. This is why it's
| capturing developer mindshare. The simplicity of getting up
| and going with it is a selling point.
| adamoshadjivas wrote:
| Agreed on everything. Just to add, not only anthropic is
| offering CC at like a 500% loss, they restricted sonnet/opus 4
| access to windsurf, and jacked up their enterprise deal to
| Cursor. The increase in price was so big that it forced cursor
| to make that disastrous downgrade to their plans.
|
| I think only way Cursor and other UX wrappers still win is if
| on device models or at least open source models catch up in the
| next 2 years. Then i can see a big push for UX if models are
| truly a commodity. But as long as claude is much better then
| yes they hold all the cards. (And don't have a bigger company
| to have a civil war with like openai)
| virgildotcodes wrote:
| Seems like the survival strategy for cursor would be to
| develop their own frontier coding model. Maybe they can
| leverage the data from their still somewhat significant lead
| in the space to make a solid effort.
| nikcub wrote:
| Cursor see it coming - it's why they're moving to the web and
| mobile[0]
|
| The bigger issue is the advantage Anthropic, Google and OpenAI
| have in developing and deploying their own models. It wasn't
| that long ago that Cursor was reading 50 lines of code at a
| time to save on token costs. Anthropic just came out and yolo'd
| the context window because they could afford to, and it blew
| everything else away.
|
| Cursor could release a cli tomorrow but it wouldn't help them
| compete when Anthropic and Google can always be multiples
| cheaper
|
| [0] https://cursor.com/blog/agent-web
| extr wrote:
| I think this is an interesting and cool direction for Cursor
| to be going in and I don't doubt something like this is the
| future. But I have my doubts whether it will save them in the
| short/medium term:
|
| - AI is not good enough yet to abandon the traditional IDE
| experierence if you're doing anything non-trivial. Hard
| finding use cases for this right now.
|
| - There's no moat here. There are already a dozen "Claude
| Code UI" OSS projects with similar basic functionality.
| madeofpalk wrote:
| I have a whole backlog of trivial tasks I never get around
| to because I'm working on less trivial things.
| ripberge wrote:
| Forking an IDE is not expensive if it's the core product of a
| company with a $900M ARR.
|
| I doubt MS has ever made $900M off of VS Code.
| extr wrote:
| "The same editor you already use for free, but with slightly
| nicer UI for some AI stuff" is not a $900M ARR product.
| shados wrote:
| CC would explode even further if they had official
| Team/Enterprise plan (likely in the work, Claude Code Waffle
| flag), and worked on Windows without WSL (supposedly pretty
| easy to fix, they just didn't bother). Cursor learnt the % of
| Windows user was really high when they started looking, even
| before they really supported it.
|
| They're likely artificially holding it back either because its
| a loss leader they want to use a very specific way, or because
| they're planning the next big boom/launch (maybe with a new
| model to build hype?).
| bredren wrote:
| > with a simple extension for some UX improvements
|
| What are the UX improvements?
|
| I was using the Pycharm plugin and didn't notice any actual
| integration.
|
| I had problems with pycharm's terminal--not least of which was
| default 5k line scroll back which while easy to change was
| worst part of CC for me at first.
|
| I finally jumped to using iterm and then using pycharm
| separately to do code review, visual git workflows, some run
| config etc.
|
| But the actual value of Pycharm---and I've been a real booster
| of that IDE has shrank due to CC and moving out of the built in
| terminal is a threat to usage of the product for me.
|
| If the plugin offered some big value I might stick with it but
| I'm not sure what they could even do.
| asdev wrote:
| for those who seldom use the terminal, is Claude Code still
| usable? I heard it doesn't do tab autocomplete in IDE like
| Cursor
| acaloiar wrote:
| https://archive.is/Rdt3z
| dalemhurley wrote:
| Cursor (and Garry Tan's X post) has shown us that the VC money is
| propping up these companies astounding growth, the only way for
| them to become profitable is to increase the cost per a request,
| which means they need to innovate like crazy.
|
| The moat is paper thin.
|
| GitHub has open sourced copilot.
|
| The open source community is working hard on their own projects.
|
| No doubt Cursor is moving fast to create amazing innovations, but
| if the competition only focuses on thin wrappers they are not
| worth the billion dollar valuations.
|
| I love watching this space as it is moving extremely fast.
| ashvardanian wrote:
| The title made sense until the comma, and then it didn't :)
| rvz wrote:
| This deal always looked strange in the first place. The usage of
| Windsurf was significantly lower than Cursor and Copilot and
| somehow it was worth $3B.
|
| Given the release of Claude Code, it was already over for them.
| pimlottc wrote:
| @dang - The title's wording suggest that OpenAI's CEO is leaving,
| not Windsurf. A more accurate title might be: "Windsurf's deal
| with OpenAI is off, and its CEO is going to Google"
| tlogan wrote:
| Could anyone explain the implications of this for Windsurf as a
| company? Are they going to close?
| mrcwinn wrote:
| What if OpenAI is buying Cursor instead?
| submeta wrote:
| I went from Emacs to VS Code, then to Cursor, next to Claude
| Code, which is so good that I feel like I am having half a dozen
| junior devs at my fingertips, 24/7.
|
| Since Claude Code is cli based, I reviewed my cli toolset:
| Migrated from iTerm2 to Ghostty and Tmux, from Cursor to NeoVim
| (my God is it good!).
|
| Just had a 14h workday with this tooling. It's so good that I
| complete the work of weeks and months within days! Absolutely
| beast.
|
| At this point I am thinking IDEs do not reflect the changing
| reality of software development. They are designed for navigating
| project folders, writing / changing files. But I don't review
| files that much anymore. I rather write prompts, watch Claude
| Code create a plan, implement it, even write meaningful commit
| messages.
|
| Yes I can vavigate the project with neovim, yes I can make
| commits in git and in lazygit, but my task is best spent in
| designing, planning, prompting, reviewing and testing.
| cm2012 wrote:
| Very unethical of the founder. It betrays his employees with
| stake and investors.
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